Mandatory disclosure as a solution to agency problems

Article Abstract:

Mandatory disclosure has evolved as a fundamental method for regulating securities because it addresses promoter problems and not because of the information that it provides to investors. Accuracy enhancement of investors is always cited as the reason for the disclosure system, but more efficient methods could be used to satisfy those concerns. The disclosure system should be seen in light of the agency cost model as a method for monitoring the activities of promoters more cost effectively. Among the revisions to disclosure requirements, self-dealing and executive compensation requirements have been the most important.

Analysis, Disclosure (Securities law), Agency theory

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Physicians with AIDS: a proposal for efficient disclosure

Article Abstract:

Notification of former patients of physicians who die of HIV-related conditions should be done only when economically efficient. In other words, 'lookbacks' should be allowed or required only when the cost of accidents prevented multiplied by the probability of accidents occurring is greater than the cost of notification. The cost of the lookback includes such factors as loss of privacy, costs of discrimination based on disability, emotional distress, loss of consortium and systemic or social costs. The high cost of disclosure plus the low probability of transmission makes lookback inefficient in most cases.

Laws, regulations and rules, Physicians, Medical professions, AIDS (Disease), Disease reporting

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Financial derivatives and the costs of regulatory arbitrage

Article Abstract:

Possible regulation of derivatives should be based on the particular uses of the financial instruments involved and not on the presumption that all derivatives are inherently good or inherently bad. Some derivatives take advantage of regulatory arbitrage opportunities, and these transactions result in distortions and deadweight welfare losses. Other transactions can be justified on efficiency and stability grounds. Regulators should investigate these influences and also consider whether additional regulations can be justified on economic efficiency grounds.

Derivatives (Financial instruments), Arbitrage

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